Oracle MES Solution for Discrete Manufacturers

Lower your costs & improve visibility through a single integrated ERP/MES solution

NOTE:

The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracles products remains at the sole discretion of Oracle.

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Oracle MES Solution for Discrete Manufacturers

Lower your costs & improve visibility through a single integrated ERP/MES solution

EXECUTIVE OVERVIEW
Meanwhile, Oracle is building a one-stop shop for ERP, EMI and MESOracle has quietly evolved overtly competitive functionality on E-Business Suites rich manufacturing data model, eliminating the need for EMI and MES partners for all but the most complex manufacturing scenarios. Colin Masson, AMR Research, March 30, 2006

Traditional barriers between Enterprise Resource Planning (ERP) systems and Manufacturing Execution Systems (MES) have diminished and new trends are emerging. ERP vendors provide MES-equivalent functionality and MES vendors provide ERP-like features. This paper describes how Oracles MES solution for Discrete Manufacturing enables manufacturers to deploy Oracle directly on the shop floor, lowering total cost of ownership and providing real-time shop floor visibility. It also highlights how Oracles MES solution maps to the 11 core MESA functions and the advantages offered by the Oracle solution.
INTRODUCTION

MESA International defines Manufacturing Execution System (MES) 1 as systems that deliver information enabling the optimization of production activities from order launch to finished goods. Using current and accurate real-time data, MES guides, responds to, and reports on plant activities as they occur. The resulting rapid response to changing conditions, coupled with a focus on reducing non-value added activities, drives effective plant operation and processes. With Oracles rich manufacturing execution capabilities, several discrete manufacturers have deployed Oracle directly on the shop floor as their MES. Additional execution capabilities are continuously being added to make Oracle as the MES, a more compelling option for discrete manufacturers.
NEED FOR AN INTEGRATED MES SOLUTION

Globalization and sustained pressure on cost containment and compliance have forced manufactures to rethink IT strategies for their plant floors. Manufacturers are now looking at standardizing their plant floor systems across the world to get better shop floor visibility, achieve tighter control of their operations, reduce their cost of compliance and ultimately, lower their total cost of ownership of IT

MESA International White Paper Number 3 titled Controls Definition & MES to Controls Data Flow possibilities, February 2000

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systems. Not surprisingly, in a report published by AMR Research in June 2005 2 , manufacturing and IT management ranked regulatory compliance or quality programs and six sigma or continuous improvement as two of their top plantrelated IT initiatives, as shown in the graph below. 2005 manufacturing investment trends

Over the past few years, manufacturers have realized that having disparate systems has made it difficult to integrate shop floor data and make it communicate with ERP. The negative outcomes of this are: Information not being available in a timely manner Poor shop floor visibility High cost associated with maintenance of too many systems High incremental costs in expansion (i.e.) addition of a new plant to enterprise

This sentiment has further been validated by a recent AMR Research article. In this report Colin Masson 3 of AMR Research states that, Not only has spending on manufacturing applications risen to the top of the popularity charts, but buyers have also indicated their preference to buy manufacturing functionality from large, stable software application vendors. For 61% of the 208 manufacturers we recently surveyed, this means their ERP vendors (see below).

2 Simon Jacobson, AMR Research, MES Market Rides Perfect Storm Through $1B Barrier, June 17, 2005 3 Colin Masson, AMR Research, OpenWorld 2006: Oracle Overtly Challenges the MES Paradigm, October 26, 2006

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Preference for manufacturing delivered by enterprise software vendors

BEST IN CLASS APPROACHES

It is important to note that best-in-class manufacturers have strategies in place to integrate manufacturing processes and systems. Some of the actions that can be taken to achieve this goal are: Improve the processes that manage the flow of material and associated information in the manufacturing plants Ensure that the manufacturing domain experts and the IT personnel work together to achieve standardization of the applications and systems used on the plant floor

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Provide an integrated system and architecture that will be a common information platform for all the manufacturing plants in the enterprise

ORACLE MES SOLUTION AND APPROACH

Additional burden has been placed on ERP and MES vendors alike to achieve the goal of standardizing plant and factory systems. According to Colin Masson of AMR Research 4 , ERP vendors are moving to overcome the following five hurdles identified by colleague Bill Swanton that have traditionally been barriers to managing the details of dynamic manufacturing processes in plants: Data model, Specialty markets, User interface, Automated data collection and integration, and Expensive implementation services. This makes an ERP-based MES solution more compelling for deployment so that eventually systems standardization can be achieved. Oracle has introduced deeper shop floor execution capabilities that will allow more customers to deploy Oracle as the MES, directly on the shop floor. The approach has been to make it easy for the shop floor operators and supervisors to carry out their daily tasks and provide a better user experience. Since there is no one size fits all MES solution, the Oracle solution provides flexibility and configurability to meet the needs of different manufacturing environments. It is best suited for manufacturing environments (but not limited to) that are low/medium production volume with high product mix, have relatively light machine automation layer and are in the process of transitioning to a paperless shop floor.
ORACLE SOLUTION MAPPING TO MESA FUNCTIONAL MODEL

Much like other categories of systems, MES is not a single function. MES has functions that support, guide, and track each of the primary production activities. MESA International 5 has identified eleven principal functions of MES (popularly known as the honeycomb model) as illustrated in the following page. Oracle has been continuously adding key capabilities to make the manufacturing execution solution footprint to make it more robust. The remainder of this section discusses how Oracles solution footprint maps to each of the MES functions.

Colin Masson, AMR Research, ERP-Based Manufacturing: Challenging MES Assumptions, July 06, 2005 5 MESA International, MES Explained: A High Level Vision, September 1997
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Resource Allocation and Status

MES software has shortened manufacturing cycle times by an average of 45%, and has made major gains in decreasing in-progress inventory, defects, and reducing non-value adding paperwork - MESA International, MES Explained: A High Level Vision, 1997

Oracle provides complete visibility on resource availability necessary for production activities. It provides an online display of resource loads and availability as well as provides tracking capabilities for resource efficiency and utilization.

Operations/ Detail Scheduling

Using Oracle, it is possible to perform both unconstrained and constraint-based scheduling. Constraint-based scheduling allows for finite scheduling for jobs and operations based on pre-defined user objectives, as well as material and resource constraints. Scheduling on simultaneous and alternate resources can be done if primary resources are not available. In both the scheduling modes, Gantt charts can be used to view the schedule as well as drag and drop capabilities allow for rescheduling.

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Dispatching Production Units

The Oracle solution allows the configuration of dispatch lists based on user preferences and re-sequencing of operations based on priorities. Flexibility to reprioritize or expedite work orders based on reality on the shop floor has also been provided. Rework management can be carried out through the use of non-standard jobs and routings.
Document Control

Control of documents such as Bill of Material, Routing, etc., that capture the asdesigned information can be achieved using the Electronic Records and Electronic Signature (ERES) capabilities to ensure that there has been the required sign-offs and approvals prior to use. The as-built information can also be signed off using ERES as the manufacturing work order progresses through shop floor. Oracle also provides enriched work content capabilities that list all the information required to perform the manufacturing operation. It includes work instructions, component and resource requirements, as well as other job property information.
Data Collection/Acquisition
the quality management functionality within the Oracles E-Business Suite has been successfully deployed in manufacturing environments with either highly configurable products or lean/high labor touchpoints to support manufacturing quality assurance (QA)/ quality control (QC) - Simon Jacobson, AMR Research, March 17, 2006

In addition to collecting manufacturing and quality data directly through the desktop applications, Oracle provides the capability for seamless data collection using RF or other mobile devices. In addition data from external sources can be imported into Oracle through the open interfaces.
Labor Management

Labor consumption can be automatically recorded using standard rates during assembly moves and completions. In addition, labor consumption can be reported manually, including ad-hoc usage of unscheduled labor. In addition, Oracle provides capabilities for labor resources to clock-in/clock-out thus allowing for actual resource usage information as well as provides real-time visibility on who is working on a particular manufacturing operation. This is an important requirement for industries such as Aerospace & Defense, Medical Devices, etc, where it is critical to capture the information on who, when, and what as it relates to a manufacturing work order.
Quality Management

Quality data can be collected in different modes and for different manufacturing transactions based on pre-defined rules. In addition, you can record nonconformance and corrective actions as part of the manufacturing process, collaborate through e-mail and workflow as well as report and analyze data through charts and graphs. Quality audits can be conducted to assess the effectiveness of the QMS. In regulated environments, such as medical devices industry, manufacturing quality data can be signed off using the ERES capabilities in order to comply with 21 CFR Part 11.

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Process Management

Oracle has significantly enhanced the process management capabilities, so that production related exceptions can be reported as they occur on the shop floor, monitored and resolved. Visual indicators on the dispatch list indicate whether a particular work order operation has open exceptions logged against it or not. The Supervisor Workbench provides a view of all the open exceptions categorized by exception type as well as provides tools for the supervisor to resolve the exceptions.
Maintenance Management

The Oracle solution supports multiple maintenance strategies, work order planning, spares management and predictive analysis of the machines and equipment on the shop floor. To manage tooling, tools can be modeled as a component in the bill of material (for expendable/consumable tools) or as resources used in a routing (for re-usable tools). The advantage of modeling tools as either components or resources allows for material planning and capacity planning respectively. For tools whose usage needs to be monitored and tracked, one option is to model tools as maintainable assets that allow for the usage to be monitored.
Product Tracking and Genealogy

Lot and serial genealogy provide an as-built view in manufacturing with drill down capabilities to the associated transactions. In addition, quality data collected during manufacturing will also be available as part of the same inquiry. Genealogy reports can be generated to obtain complete traceability information. Although traceability in general is an industry requirement, the ability to meet this requirement is very important in regulated environments, such as medical device manufacturers where this information is required to handle product recalls and customer complaints.
Performance Analysis

Oracle can provide a real time view of the manufacturing data and the key performance indicators (KPIs) can be presented in the form of graphs or reports. Some of the KPIs are Performance to Schedule, Inventory Turns, WIP days on hand, Resource Utilization, Scrap, Returns, etc.
Regulatory Compliance

Although regulatory compliance is not one of the core MES functions as identified by MESA, for todays manufacturers, compliance to regulations such as FDAs 21 CFR Part 11, RoHS, etc. are becoming extremely important. Oracle provides electronic records and electronic signature capability for critical business events in manufacturing and service (to support the functional

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requirements in 21 CFR Part 820) with easy to configure, rule based approvals. In addition RoHS initiatives are also supported by the Oracle solution. The following table lists the Oracle solution that has the capabilities to meet the requirements for a specific MES function. MES Function Resource Allocation and Status Operations/ Detail Scheduling Oracle Solution Oracle Discrete Manufacturing Oracle Production Scheduling Oracle Discrete Manufacturing Dispatching Production Units Oracle Manufacturing Execution System (MES) for Discrete Manufacturing Oracle MES for Discrete Manufacturing Oracle Discrete Manufacturing Oracle MES for Discrete Manufacturing Oracle Mobile Supply Chain Applications Oracle Warehouse Management Oracle Manufacturing Open Interfaces Labor Management Quality Management Process Management Maintenance Management Product Tracking and Genealogy Performance Analysis Regulatory Compliance Oracle MES for Discrete Manufacturing Oracle Discrete Manufacturing Oracle MES for Discrete Manufacturing Oracle Enterprise Asset Management Oracle Discrete Manufacturing Oracle E-Business Intelligence Oracle Discrete Manufacturing Oracle Service, Oracle Field Service Oracle Product Lifecycle Management

Document Control Data Collection/Acquisition

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ADVANTAGES OF THE ORACLE MES SOLUTION

Lower Total Cost of Ownership (TCO)

Deploying Oracle as the MES, will lead to the elimination/reduction of additional costs for licensing, implementing, integrating, training, and maintaining additional MES products. Overall, his will result in a lower total cost of ownership.
Single Integrated Data Model

By adopting Oracle as the MES, the benefit realized is all the data is in a single data model, thus avoiding the confusion of identifying which system has the most current data and is the source of truth. In addition, you get out of the box integration for modules within Oracle, thus minimizing the need for any additional integration needs and data synchronization. In regulated environments, this mitigates risk.
Support and Flexibility for multiple manufacturing modes and industries
Oracle has multiple manufacturing models available (discrete, flow, repetitive and process), to support its target markets - Colin Masson, AMR Research, July 06, 2005

Traditionally, MES solutions are delivered for a particular production mode, production process or for a particular industry. In contrast the Oracle MES solution supports multiple production modes such as make-to-stock, make-toorder, configure-to-order, and engineer-to-order, as well as supports multiple production processes such as, traditional discrete manufacturing, flow/lean manufacturing or lot-based manufacturing within the same plant or multiple plants within the same global instance. In addition, the flexibility and configurability features that are available as part of the solution allow it to be tailored for specific implementation needs.
Standardization of Procedures and Processes

Adoption of Oracle as the MES, leads to the best practice of standardizing procedures and processes, as well as regulatory compliance across multiple manufacturing locations, thus providing the same degree of visibility across the enterprise into manufacturing methods, metrics, etc. This in turn leads to reduction/elimination of non-value added activities on the shop floor.
Complete Supply Chain and Shop Floor Visibility

A combination of the different modules in the E-Business Suite can provide complete end-to-end supply chain visibility as well as tighter control and better shop floor visibility, especially in regulated environments. According to MESA, Collaborative MES, or c-MES 6 (a newly coined term by MESA) is the next generation of MES that combine earlier generation MES functionality to operate and improve plant operations and better ability to integrate

MESA International, MESAS Next Generation Collaborative MES Model, May 2004
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with other systems and people in the enterprise and value chain/stream. Based on this trend and next generation MES, Oracle is the best-suited solution to meet these needs.
Product Costing and Inventory Valuation

Product costing and inventory valuation are important functions of the ERP system. The Oracle solution provides many choices of costing methods to suit different business environments. By using Oracle, the significant benefit is that no additional steps are required to process the transaction data so that associated costs can be computed. If a third party MES is used, the transactions from that system need to be imported into Oracle. During this process, if the transaction details do not map one-to-one to the equivalent Oracle transactions, the computed cost may not be the "true" cost.
Integrated Enterprise Manufacturing Intelligence (EMI)

This is an obvious benefit for Oracle E-Business Suite customers who adopt Oracle as the shop floor execution system. According to Colin Masson of AMR Research 7 By combining Oracles innovative approach to Daily Business Intelligence, which seamlessly integrates performance metrics with transactional data, incrementally updating metrics as transactions occur, with an integrated MES model, EMI becomes a much simpler proposition for Oracle E-Business Suite customers.
CONCLUSION

As discussed earlier, the lack of an integrated ERP/MES solution is likely to result in poor shop floor visibility as well as increase in manufacturing operations costs. Disparate manufacturing systems can potentially hurt the competitive edge to respond to customer demand and pricing pressures. These are further compounded by both business and IT challenges. By the adoption of Oracle as the single integrated ERP/MES solution, significant benefits such as lower total cost of ownership, real time shop floor visibility, flexibility, configurability, reduction/elimination of non-value adding activities can be realized. All these benefits can be realized without having to compromise on meeting the requirements of the core MES functions as defined by MESA International.

Colin Masson, AMR Research, Integrating EMI with ERP: A Tale of Two Vendor Strategies, August 31, 2005

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APPENDIX A MES FUNCTIONS 8

1. Resource Allocation and Status Manages resources including machines, tools labor skills, materials, other equipment, and other entities such as documents that must be available in order for work to start at the operation. It provides detailed history of resources and insures that equipment is properly set up for processing and provides status real time. The management of these resources includes reservation and dispatching to meet operation scheduling objectives. 2. Operations/Detail Scheduling Provides sequencing based on priorities, attributes, characteristics, and/or recipes associated with specific production units at an operation such as shape of color sequencing or other characteristics which, when scheduled in sequence properly, minimize set-up. It is finite and it recognizes alternative and overlapping/parallel operations in order to calculate in detail exact time or equipment loading and adjust to shift patterns. 3. Dispatching Production Units Manages flow of production units in the form of jobs, orders, batches, lots, and work orders. Dispatch information is presented in sequence in which the work needs to be done and changes in real time as events occur on the factory floor. It has the ability to alter prescribed schedule on the factory floor. Rework and salvage processes are available, as well as the ability to control the amount of work in process at any point with buffer management. 4. Document Control Controls records/forms that must be maintained with the production unit, including work instructions, recipes, drawings, standard operation procedures, part programs, batch records, engineering change notices, shift-to-shift communication, as well as the ability to edit as planned and as built information. It sends instructions down to the operations, including providing data to operators or recipes to device controls. It would also include the control and integrity of environmental, health and safety regulations, and ISO information such as Corrective Action procedures. Storage of historical data. 5. Data Collection/Acquisition This function provides an interface link to obtain the intra-operational production and parametric data which populate the forms and records which were attached to the production unit. The data may be collected from the factory floor either manually or automatically from equipment in an up-to-the-minute time frame.

MESA International, MES Explained: A High Level Vision, September 1997

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6. Labor Management Provides status of personnel in and up-to-the-minute time frame. Includes time and attendance reporting, certification tracking, as well as the ability to track indirect activities such as material preparation or tool room work as a basis for activity based costing. It may interact with resource allocation to determine optimal assignments. 7. Quality Management Provides real time analysis of measurements collected from manufacturing to assure proper product quality control and to identify problems requiring attention. It may recommend action to correct the problem, including correlating the symptom, actions and results to determine the cause. May include SPC/SQC tracking and management of off-line inspection operations and analysis in laboratory information management system (LIMS) could also be included. 8. Process Management Monitors production and either automatically corrects or provides decision support to operators for correcting and improving in-process activities. These activities may be intra-operational and focus specifically on machines or equipment being monitored and controlled as well as inter-operational, which is tracking the process from one operation to the next. It may include alarm management to make sure factory person(s) are aware of process changes which are outside acceptable tolerances. It provides interfaces between intelligent equipment and MES possible through Data Collection/Acquisition. 9. Maintenance Management Tracks and directs the activities to maintain the equipment and tools to insure their availability for manufacturing and insure scheduling for periodic or preventive maintenance as well as the response (alarms) to immediate problems. It maintains a history of past events or problems to aide in diagnosing problems. 10. Product Tracking and Genealogy Provides the visibility to where work is at all times and its disposition. Status information may include who is working on it; components materials by supplier, lot, serial number, current production conditions, and any alarms, rework, or other exceptions related to the product. The on-line tracking function creates a historical record, as well. This record allows traceability of components and usage of each end product. 11. Performance Analysis Provides up-to-the-minute reporting of actual manufacturing operations results along with the comparison to past history and expected business result. Performance results include such measurements as resource utilization, resource availability, product unit cycle time, conformance to schedule and performance to standards. May include SPC/SQL. Draws on information gathered from different

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functions that measure operating parameters. These results may be prepared as a report or presented on-line as current evaluation of performance.

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Oracle MES Solution for Discrete Manufacturers: Lower your costs and improve visbility through a single integrated ERP/MES solution November 2006 Author: Aravindan Sankaramurthy Contributing Authors: Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA 94065 U.S.A. Worldwide Inquiries: Phone: +1.650.506.7000 Fax: +1.650.506.7200 oracle.com Copyright 2006, Oracle. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission. Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.